OpenAI has more than doubled its annualised revenue to $3.4 billion in the past six months, OpenAI CEO Sam Altman informed staff, reported The Information.
The majority of OpenAI’s revenue—around $3.2 billion on an annualized basis—comes from subscriptions to its chatbots and fees from developers accessing its models via an application programming interface.
Microsoft takes a cut from some of OpenAI’s AI model sales since they run on Microsoft’s cloud. Additionally, OpenAI receives a share from Microsoft’s sales of OpenAI models to Microsoft’s Azure cloud customers. This share now amounts to about $200 million on an annualised basis, or roughly 20% of the revenue Microsoft generates from that business, according to Altman.
The startup’s financial losses were not disclosed but have been substantial in the past.
Chinese investor and serial entrepreneur Kai Fu Lee is bullish about OpenAI becoming a trillion-dollar company in the next two-three years. “OpenAI will likely be a trillion-dollar company in the not-too-distant future,” said Lee, adding that GPT-4 and GPT-4 Turbo are unbelievably good and a great balance for performance and cost.
Apple’s announcement this week that it will integrate ChatGPT into its products could further boost OpenAI, though the terms of the deal, including whether Apple is paying OpenAI, remain unclear.
Apple is not paying OpenAI. Instead, Apple believes that promoting OpenAI’s brand and technology on hundreds of millions of its devices is of equal or greater value than monetary payments, according to a Bloomberg report.
OpenAI plans to launch several new products, including a search engine, its video-generating model Sora, and AI-powered software capable of taking actions on users’ computers, which could further enhance revenue.
An OpenAI spokeswoman described the financial details as ‘inaccurate,’ without further explanation, according to The Information.
OpenAI’s revenue rate positions it ahead of its competitors. For example, last fall, Anthropic reported generating revenue at a $100 million annualised rate, with plans to reach over $850 million by the end of 2024. Cohere, a Canadian OpenAI rival, reported generating just $22 million in annualized revenue in April.
OpenAI was recently valued at about $86 billion during an employee share sale. The latest revenue figures suggest OpenAI is valued at approximately 25 times forward revenue, which is on the lower end of recent fundraising valuations for private AI startups.